German January Apartment Prices Had First Annual Dip Since 2009

German apartment prices, which have risen so sharply in some cities that the central bank warned of an overheating property market, fell in January for the first time in four years, according to the Europace EPX Index.

Europace, an online mortgage broker based in Berlin, said its apartment index declined 0.7 percent in January from a year earlier, the first annual drop since December 2009. Europace’s overall homes index, which includes houses, rose 3.4 percent.

Home prices have been climbing as Germans invest in assets that would retain their value if the euro crisis leads to higher inflation. Foreign investors are also buying property in the country as they try to increase their returns amid low interest rates. In November, the Bundesbank said German home prices may be in danger of overheating in some regions, although the risk of a nationwide bubble is low.

An appreciating euro may have contributed to the decline in apartment prices, said Michaela Reimann, a spokeswoman for Europace. The euro gained about 2.8 percent against the dollar in January, according to data compiled by Bloomberg.

“Home prices are already quite high, and sometimes there are seasonal fluctuations and currency effects whose influence is difficult to measure,” said Reimann.

To contact the reporter on this story: Dalia Fahmy in Berlin at

To contact the editor responsible for this story: Andrew Blackman at

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